UnitedHealth in $4.9 B Deal in Brazil, Stocks Open Lower

Arthi Gupta
08 Oct, 2012
New York City

U.S. indexes declined in early trading on weaker global growth outlook. UnitedHealth agreed to acquire Brazil

[R]10:30 AM New York – U.S. indexes declined in early trading on weaker global growth outlook. UnitedHealth agreed to acquire Brazil–based Amil for $4.9 billion. Precision Castparts agreed to acquire Texas Honing.[/R]

U.S. indexes declined in early trading on global economic growth worries and elevated tensions in the euro zone.

European indexes traded lower as Spain and Italy regained the focus and the euro zone finance ministers meet in Luxembourg today to discuss the region’s escalating debt crisis.

In Asian economic news, there was a slight improvement in business activity in China during September, according to a survey released from Markit Economics today.

The headline HSBC business activity index rose to 54.3 in September from 52 in August.

Separately, the World Bank lowered its growth forecast for China to 7.7% this year, citing weak exports and lower investment growth. The bank noted that economic growth in the East Asia and Pacific region may slow down to 7.2% this year from 8.2% in 2011.

UnitedHealth to Acquire Brazil Based Amil

UnitedHealth Group and Brazil–based Amil Participações S.A. agreed to acquire the largest, most diversified healthcare company serving the Americas.

United Health looked for a deal in the overseas markets as the company searches for more sustainable growth outside the U.S. and take advantage of growing middle class and rising income in Brazil.

UnitedHealth Group intends to acquire 90% of the 359 million outstanding common shares of Amil for approximately $4.9 billion in cash.

Under the terms of the deal, UnitedHealth will first acquire 60% of Amil and after securing $600 million of Brazilian tax breaks will acquire additional 30% stake in the company in the first half of 2013.

Edson Bueno, Amil’s founder and his business partner Dulce Pugliese control a total of 70% of the company and will retain 10% stake in Amil after the transaction. Bueno will also acquire $470 million of United Health’s stock and agreed to hold shares for five years and he will join the board and continue to run the company.

Amazon to Buy Corporate Headquarters

Amazon.com Inc., the online retailer agreed to buy its 11-building office headquarters complex in Seattle for $1.16 billion from Microsoft co-founder Paul Allen''s investment company.

The 11 buildings comprise 1.8 million square feet of its currently leased corporate office space in the South Lake Union neighborhood in Seattle.

Amazon expects to close the deal in the fourth quarter.

Precision Castparts to Acquire Texas Honing

Precision Castparts Corp. agreed to acquire Texas Honing, Inc. Financial terms of the deal were not disclosed.

The company said the cash acquisition of THI will be immediately accretive to earnings.

NBT Bancorp to Combine with Alliance Financial

NBT Bancorp Inc. and Alliance Financial Corporation inked an agreement under which Alliance will merge with and into NBT. The merger is valued at approximately $233.4 million and is expected to close in the second quarter of 2013.

The transaction is valued at $48 per Alliance’s share based on NBT''s average closing stock price of $22.04 for the five-day trading period ending on October 5.

TPC Receives Non-Binding Proposal from Innospec

TPC Group Inc. today said it received a non-binding proposal to be acquired by Innospec Inc. As part of this proposal, Innospec with an offer price in the range of $44 to $46 a share.